Sowers still working to get seized cash returned

Associate Editor

WASHINGTON (April 12, 2016) — A Congressional subcommittee fighting to have nearly $30,000 returned to a Maryland dairy farmer continued late last month demanding the federal government hand over the seized cash.
Representatives with the Internal Revenue Service told the House Ways and Means Oversight subcommittee the money, which committee members said was wrongly seized during an FBI investigation three years ago, is currently under Justice Department jurisdiction because the farmer, Randy Sowers, challenged the seizure in court, according to a letter the committee sent to IRS Commissioner John Koskinen on March 23.
The money was taken in 2012 from Randy and Karen Sowers, owners of South Mountain Creamery in Middletown, after government officials said Karen Sowers violated a little-known banking law when she repeatedly deposited cash proceeds from farmer’s market sales into a bank account in increments just under $10,000 — the threshold where banks must report cash deposits to the federal government.
The deposits were structured that way at the request of a bank teller who wanted to avoid the reporting paperwork, Randy Sowers said.
The couple was never charged with a crime, though Randy Sowers settled the case by agreeing to forfeit about 10 percent of the roughly $300,000 deposited into the account in structured amounts over the 30-week period from April to December of 2011.
Sowers claims law enforcement officials pressured him into the settlement by threatening to seize more money if he didn’t agree to the $30,000.
The government requires banks to report the cash deposits because it uses that information to search for and track criminals who deal primarily in cash — drug dealers, terrorism financiers, money launderers, tax dodgers and the like.
The committee has been working since February 2015 on behalf of people like Sowers who had money seized by the government because of how they structured cash deposits even though they were never charged with a crime.
In its March letter, the committee referred to a December meeting with IRS and Justice Department officials who said they were unsure they could legally review closed cases where cash or other assets may have been wrongly seized.
They also said the agencies may not have “available” money to give back to the victims, according to the letter.
“The Subcommittee is troubled by the agencies’ response,” the letter said. “The agencies’ representatives at that meeting did not provide any legal reasoning for why such a review would be illegal, and they seemed unconcerned that the IRS and (Justice Department’s) actions in these cases unfairly harmed American citizens and have undermined Americans’ trust in their government.”
Critics have lambasted the seizure process, known as civil asset forfeiture, by saying both federal and state law enforcement agencies abuse the process to pad their own budgets with money that can be spent at their own discretion.
“It’s wrong as it can be, but I’m just trying to be patient with the guys who are (helping me) because without that support we wouldn’t have gotten anything done,” Randy Sowers said last week. “It’s strong-arming. … They don’t want to fight you, they just want your money.”
Federal agencies said last year they changed their seizure policies and will no longer target those who have made “structured” cash deposits but are not suspected of committing a crime.
But the Justice Department raised eyebrows late last month when it announced it was resuming a controversial piece of its civil asset forfeiture program that allows state law enforcement agencies to circumvent state restrictions on funneling large portions of seized cash and assets into their own coffers.
It’s called the Equitable Sharing Program, and it allows state law enforcement agencies to keep large portions of seized assets by working jointly with federal agencies and prosecuting cases under less restrictive federal law.
When asked about the sharing program’s revival, a Justice Department spokesman, in an email, said, “The department remains committed to our valued state, local, and tribal law enforcement partners, whose dedication and efforts are essential to the success of our federal law enforcement efforts.”